We're at the dawn of a new computing age, where data resides on a server somewhere and it's accessed from your Web browser — they're calling it "cloud computing." You know this concept is starting to catch on when giant Microsoft enters the fray, announcing Windows Azure, a new operating system that resides completely on the Internet.

Microsoft says Azure won't replace the upcoming Vista update, which the company is calling Windows 7, but will work along with it, letting developers create custom applications that run entirely on the Internet, accessible from web browsers on PCs, laptops, netbooks, smartphones and cell phones. Microsoft hopes that businesses will use Azure on Microsoft's servers to do all their computing, effectively outsourcing their Information Technology departments off-site. This means we'll be seeing online versions of everything Microsoft makes, but they won't be free like most other cloud apps.

Businesses are supposed to like this, placing all their data on a remote server that's protected from earthquakes, fires and so on. But will they like that loss of complete control over their data? For the rest of us, Microsoft already has a few Windows Live web-based apps for consumers available, and hopes to run them on Azure, too. But Microsoft has a long way to go if it wants to compete against the variety of great and free apps from Google, Amazon and many others. Good luck with that.

Microsoft, via ReadWriteWeb and New York Times